US prohibits new investment in Russia; targets more banks and individuals

President Joe Biden signed an executive order prohibiting investment in Russia by individuals or companies from the United States.

Addressing the development, a white house spokesperson said that roughly 600 multinational companies had already left Russia, and that number will only continue to grow.

More banks targeted

Having sanctioned Russia’s Central bank and many of its largest banks already, the US has now blocked its biggest financial institution Sberbank and also its top private bank, the Alfa Bank.

Sberbank Headquarters in Moscoq
Sberbank HQ in Moscow © Igorkhait, CC BY-SA 4.0

Estimating that the Russian banks held around 1.4 trillion USD, the White House said two-thirds of that is currently being blocked.

The US and G7 countries are also trying to eject Russia from economic order, so it could also lose its borrowing privileges from the IMF and the world bank.

And since Russia cannot use its frozen central bank funds to make payments, it is likely to default, said the White House.

More individuals sanctioned

According to the White House spokesperson, the US has sanctioned 140 oligarchs and 400 key government officials.

Expanding that list, the US has sanctioned President Putin’s daughters, Maria Putina and Katerina Tikhonova, and Foreign Minister Sergei Lavrov’s wife and daughter.

More gloom predicted for the Russian Economy

Russia’s GDP is projected to shrink by double digits, more than the loss it had seen when it defaulted in 1998, said the White House.

The spokesperson added that the Russian Inflation is already over 15 percent, interest rates are at 20 percent, and from being the 11th largest Economy, Russia is likely to drop out of the first 20.

India is a friend

Answering a question, the spokesperson said that India is a friend of the United States and that both countries work together on global food security and energy supplies.

Reminding that the G7 countries are taking the current economic measures, a group of which India is not a member, the spokesperson said that the US would try for maximum alignment in the issue.